Speaking at the launch of the AFA’s New Frontiers white paper yesterday, Fox said the new regulatory environment was pushing the industry in the direction of shorter-term adviser-client relationships.

“FOFA is driving an outcome where not every client is suited to a long-term relationship with a financial advice business,” he said.

“They will be suited to initial advice, possibly scaled advice, but some people actually do need transaction-based advice that is right for today and may not need to pay an ongoing maintenance fee over 15 years.”

However, Fox said the shift to short-term relationships may not necessarily be a bad thing for advisers.

“At the moment, only two in 10 Australians are seeking advice,” he said. “The priority is getting more people in the door.”

The paper – which was written off the back of a four-year study of more than 12,000 clients by Business Health – found that specific strategies need to be put in place to avoid losing clients who have been with their adviser for between three and seven years.

At the same time, the risk to long-term client relationships is not unavoidable, according to the white paper.

“The very nature of the relationship is different with the clients in the three to seven year bracket,” the white paper stated.

“The initial euphoria that comes that comes from putting together a new financial strategy may now have worn off and there may not be a need be a need to regularly buy and sell investments, update the level of protection cover or alter the strategic advice.”

The paper used Business Health’s CATScan tool to measure satisfaction with key areas of service delivery.

“Financial review process” received the lowest satisfaction rating (3.95), followed by “range of services” (4.05) and “communication” (4.09).

The low satisfaction ratings for these key performance indicators demonstrate that advisers need to pay more attention to receiving and acting on client feedback, and tailor regular communications to various segments of their client base, the report states.